Should i expect 30% expenses on top or mortgage?

[Fabien Chanoz]

Hello to you all i was wondering that most people fail in real estate because the mortgage and the expenses end up being more than they expected and then they find themselves under 

I was wondering how should i calculate becore buyng not to be taking from my own pocket? I heard about the 50 percent rule but it does not seem realistic or maybe i did not undrstand it well Should i expect 30% expenses on top or mortgage?

IN Paris where i live found a plce 90 000 EUROS 10 M2

RENTS FOR 450  Even if the mortgage is 350 Euros it is not  agood deal right?

THANK YOU

[Joe Splitrock]

Originally posted by @Josh Young:

Originally posted by @Joe Splitrock:

The 50% rule is for multi-family. It is a generalization to offer quick analysis. It is no applicable to a single family home in most cases. There is a property analyzer tool you can use here on the site that will give you more accurate numbers. It depends on your expenses. Mortgage is one expense, but there is also taxes, insurance, utilities, home owners association and repairs. Anyone analyzing your deal would need to know these details.

 So what percentage do you typically use for a single family unit if 50% is for multi family? I'm a newbie trying to train on analyzing deals and I've been using 50 percent, is that far too conservative?

When I am looking at buying a single family home, I focus on major capex. Roof, furnace, AC, water heater, siding, flooring, windows, appliances. I make a list of anything that is at the end of its life and plan out what those costs will be. I make sure my purchase price reflects any upcoming expenses. I budget 10% for repairs and 10% for capex. In reality one year there is nothing and the next year something major, so it washes out. Insurance, mortgage and taxes are known amounts, so I can plug in the exact value. It works out to 40%. If I have a home that has been updated, then I could use 30%.